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Lord Clanwilliam buys as NMC fights back

Purchase came before news that NMC had hired a former FBI director to provide a report on allegations raised by Muddy Waters
January 17, 2020

NMC Health (NMC) has added the firm of a former FBI director to its balance sheet and governance review, which was prompted by a Muddy Waters short attack report. The Middle East hospital owner and operator said Louis Freeh’s company, Freeh Group International Solutions, would provide a “completely independent, unbiased, comprehensive and transparent” report into NMC. The company’s share price was up 7 per cent on the news, although these gains came off in the following days.

IC TIP: Sell at 1,452p

Before the Freeh announcement, director Patrick Meade, known as Lord Clanwilliam, bought £50,160 worth of NMC shares. He paid 1,378p a share on 13 January. This show of faith came after a major sale from former largest shareholder Saeed Mohamed Al Qebaisi, who held 21 per cent of NMC, and Khalifa Butti Al Muhairi. The two men sold a combined $490m (£374m) in shares at 1,200p apiece. NMC said the sales were to reduce “outstanding indebtedness of themselves and other corporate entities owned by them”.

Muddy Waters alleged NMC was not being straight with its cash balances and reported debt, and had overpaid for assets. NMC has said its balance sheet is correct and accused the fund of getting its facts wrong, but has spent several weeks looking into its cash balance, with a report expected before the 2019 results come out in March. Muddy Waters has said the company should review and report its debt figures at the same time.

The company has said its investigation would initially focus on its cash balances. Mr Freeh, who ran the FBI from 1993 to 2001, has more recently run a law firm. Through this law firm he has registered as a lobbyist for sanctioned Israeli mining magnate Dan Gertler, who was a dealmaker for Glencore in the Democratic Republic of Congo and is accused of corruption by the US Treasury.

Updated on 22 Jan 2020 to include director deal details